US objects to Chinese involvement in UK nuclear project

As the UK attempts to decarbonize its energy, any US concerns regarding the Moorside project could put the British government in a dilemma as power supply shortfalls loom

UK Members of Parliament have organised a petition imploring the government to support the construction of a new nuclear power station at Moorside in West Cumbria.

However, according to sources in the Sunday Times, Britain's closest political and military ally, the US, is exerting pressure to block any involvement from China General Nuclear (CGN). Since the Second World War, the US and Great Britain have bonded in a so-called special relationship, so any security or national interest concerns raised by Washington would undoubtedly be taken into account by the British government before any final decision is made on the power station.

This proposed nuclear power station has been plagued with setbacks for some time. In early November Toshiba held a board meeting to decide on the future of NuGen, the company which owns the rights to develop the 3.8GW Moorside project. The Toshiba board decided to wind up NuGen. Supporters of the project, including local Members of Parliament, have since been backing CGN to step in.

Some of these local politicians recently launched a petition calling on the government to support a new nuclear power station at Moorside. They said that a possible future Labour government would take a public stake in Moorside to guarantee the project's progress, adding that no nuclear power station anywhere in the world had ever been built without government backing. The petition remains open until June 2019.

In November, in their role as co-chairs of the All-Party Nuclear Energy group, Sue Hayman, Labour Member of Parliament for Workington and co-chair of the All-Party Parliamentary Group on Nuclear Energy, and fellow West Cumbrian MP Trudy Harrison were in China, and met with senior representatives of CGN.

However, according to the Sunday Times, the US is bringing pressure to bear, with the US State Department making its objections clear to the UK Department for Business, Energy and Industrial Strategy. According to their sources, one major area of concern is the proximity of Moorside to Barrow-in-Furness, the seaside town where Britain's nuclear submarines are built.

Nevertheless, CGN has already made significant strides in the UK's nuclear power industry, holding a minority stake investment in Hinkley Point C nuclear power station. This project is being led by France's EDF and is located in Somerset, southwest England.

CGN and China National Nuclear Corporation (CNNC) have been jointly promoting the Hua-long Pressurized Reactor 1000, which CGN wants to put into service at another planned project, the Bradwell B nuclear power station.

CGN and EDF Energy are together intending to develop the new nuclear power station at Bradwell-on-Sea, Maldon in Essex. They are currently in the process of carrying out technical assessment work and consultation exercises.

The collapse of NuGen may persuade the UK government to work more closely with China, especially since Chinese companies often bring their own debt finance as part of the package. And, given the ambitions of China to promote the export of its nuclear technology to Europe, the UK may feel that Chinese firms may be more likely to deliver than the series of companies that have so far come and gone on the Moorside project.

Any US objections to Chinese involvement just adds to the complexity of a project that has been beset with problems for some time and doubts remain whether it will ever see the light of day.

A consortium of France's GDF Suez, Iberdrola of Spain and Scottish and Southern Energy (SSE) was originally formed to develop the Moorside project. SSE later pulled out, selling their 25% stake to GDF Suez and Iberdrola. In 2014 Toshiba entered the picture, buying Iberdrola's 50% stake, and a further 10% from GDF Suez.

Toshiba subsidiary Westinghouse planned three reactors at Moorside with a combined capacity of 3.6GW. In 2015 GDF Suez changed its name to Engie.

In 2017 Toshiba shares were hit when Westinghouse Electric revealed that it may have overpaid by several billion dollars for another nuclear construction and services business. Westinghouse subsequently filed for Chapter 11 bankruptcy protection. At that point Korea Electric Power said it was interested in becoming part of NuGen. Engie subsequently exercised its right to sell its 40% stake in NuGen to Toshiba, leaving Toshiba as sole owner.

In January 2018 Toshiba sold Westinghouse Electric Company to infrastructure investors Brookfield in a 3.4 billion pound deal.

Local MPs claimed that Toshiba and Kepco effectively reached a deal for the sale of 100% of the company, but that Kepco wanted some assurances from the UK Government, which were not forthcoming.

They add that the UK government is facing a sizeable shortfall it its future energy generation plans, which is exacerbated by ambitious goals for UK car owners to switch to electric vehicles.

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Date

2 Jan 2019

Channel

Europe

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